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Is Responsible Capital Deployment the Need of the Hour for Chemical Companies?

Innovation is considered to be the cornerstone of profitability and growth for chemical companies and a prerequisite for long-term performance in the industry. While most chemical innovation continues to be solidly rewarding and returns well above the cost of capital, there are chances of major variations in the outcomes of innovation projects. Therefore, deciding on how and where to deploy capital may be one of the most challenging tasks for executives of chemical companies. Responsible deployment of capital and the sustainable use of ongoing resources is critical to the success of mega-project development. Therefore, it’s not enough to understand past successes or failures. To plan investments that will meet the near- and mid-term goals, companies also need to be able to anticipate potential outcomes catalyzed by factors such as feedstock, technology, and regions.Request Free Proposal

How technology and market familiarity affect financial returns in the chemical industry?

Chemical engineers and other researchers are continually introducing new innovations. The development and commercialization of these new technologies, which are highly disruptive will impact capital deployment decisions. The rate of return on a project that involves innovation-investment also varies depending on the company’s level of familiarity with the market and the technology. For instance, several companies are finding new ways to support molecular valorization, the practice of enhancing the value of feedstocks, which is a key goal of disruptive technology development.

How can chemical companies improve innovation performance?

There is immense scope for improvement in terms of innovations for chemical companies. Here are areas where change  can have a significant impact on chemical companies:

Improve innovation discipline

Most innovations, especially those that involve new technologies, require the deployment of new capital during commercialization. If performed incorrectly, this additional capital requirement can easily destroy innovation returns. Many chemical companies consider that new products must be launched from full-scale plants to meet cost targets and qualification requirements. Chemical and material innovations are most often adopted at a higher cost than other essential products. Instead of deploying large amounts of capital to build world-scale plants, companies should take a measured approach with flexible pilot plants that allow for modification of properties to meet market needs. This approach reduces overall risk in two ways: it lowers the total capital outlay and also increases the probability of adoption.

Improve market-insight capabilities

Chemical companies are often good at understanding the needs of existing customers in existing markets. However, they have proved to be weaker at generating insights about new markets. Hence, the risks of market entry for companies in the chemical industry are similar to those of developing a new technology. The focus on market insight capabilities at most chemical companies to be far lower than the focus on technology capabilities. While developing market insights is neither easy nor cheap, doing so is far quicker and less expensive than developing a technology. Investing in this area reduces risk, accelerates commercialization, and increases returns. If done well, market-insight capabilities will prove to effectively be a force multiplier for technology investment.


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IR4

Market Segmentation Solution Helps a Chemical Fertilizer Supplier Reach Out to the Most Promising Target Segments

chemical fertilizer

LONDON: Infiniti Research, a global market intelligence solutions provider, has announced the completion of their latest market segmentation solution for a chemical fertilizer client. The chemical fertilizer industry is witnessing considerable growth owing to the growing demand for food production. Due to the exponential rise in global population, organizations are moving towards the use of effective and low-cost fertilizers for agricultural production. Moreover, the growing demand for plant-based foods products as a dietary supplement is compelling organizations to re-align their product offerings and cater to the needs of the target customers. The demand for crops used for biomass is another factor fueling the growth of the chemical fertilizer market.

“A market segmentation solution helps companies understand their target audience and efficiently sell their product offerings to meet the target demands. The solution also helps companies to allocate their resources to meet the business requirements adequately. “says an expert at Infiniti Research.

 

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The solution offered helped the chemical fertilizer client to devise a suitable marketing strategy to position their products efficiently and satisfy the requirements of the specific target market. The solution also helped the client to maximize profitability by focusing on company’s resources.

Additional Benefits of the Market Segmentation Solution

  • Understand the buying behavior of customers and identify different segments based on the customer interests
  • Identify the needs, priorities, and common interests of the customers and adequately position their products to meet the customers’ demands
  • To know more, request a free proposal

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Infiniti’s Marketing Strategy Helps A Renowned Organic Chemicals Manufacturer Analyze their Business Performance

Amid declining production and inventory rightsizing, the chemical industry witnessed an increased sales growth of 2.1% in 2016

The organic chemicals space is witnessing considerable growth with the rising industrialization and rapid urbanization. With the growing demand for organic chemicals among the end-user segments such as food and beverages, pharmaceuticals, and pesticides, the chemical industry at large is focusing on innovations to improve their production capabilities and enhance their overall marketing return on investment.  Additional factors such as the growing financial prosperity coupled with the rising disposable income levels are expected to have a positive impact on the growth of the organic chemicals manufacturing space. Stringent regulations and growing awareness regarding the adverse effect of organic chemicals on health and environment may hinder the growth of the chemical industry. Our experts at Infiniti provide strategic insights that help in gaining a better understanding of the chemical industry trends and the drivers influencing the demand for organic chemicals.

Here are some of the challenges faced by the companies in the organic chemicals space:

  • Increasing competition: Staying ahead of the competition becomes a challenge for the organic chemicals manufacturers with new players coming from non-traditional sectors such as energy, utilities, and mining. Moreover, companies operating in the chemical industry are reinventing themselves to become more agile and retain their market share in the industry.
  • Keep pace with the rapid regulatory changes: Today, the organic chemicals manufacturers have to meet regulations in terms of labeling, handling, and storage of the products. So, organizations need to invest extensively in research and development to ensure that they are compliant with the set regulatory standards.

For players looking to establish themselves as major organic chemicals manufacturers, marketing strategy helps outline a business plan to achieve the desired business goals. Companies in the organic chemicals space can leverage the use of marketing strategy to understand the current chemical industry trends and identify the competitors to improve the overall business performance.IR_RFP

The Business Challenge

  • The client- A renowned organic chemicals manufacturer

The client, a renowned organic chemicals manufacturer, wanted to better understand the chemical industry trends and the unique selling proposition to differentiate their products from the other suppliers of organic chemicals. The organic chemicals manufacturer also wanted to understand the 5Ps of the marketing mix regarding the product, price, place, promotion, and the people. Through a robust marketing strategy, the manufacturer wanted to keep the brand in mind to develop, assess, and devise an effective marketing plan.

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Our Journey

To devise a robust marketing plan for the organic chemicals manufacturer, Infiniti’s marketing strategy experts carried out extensive research comprising interviews and discussions with prominent stakeholders in the chemical industry. Moreover, to identify the latest chemical industry trends, our experts compiled information from a wide array of reliable sources such as trade shows, company presentations, and industry forums.

The Solution Benefits and the Business Impact

The marketing strategy solution offered by Infiniti offered insights to help the client create a flexible strategy to respond to changes in the customer perception and demand. Moreover, the organic chemicals manufacturer was able to develop a SWOT analysis to understand the strengths and weakness of the companies operating in the organic chemicals space. Moreover, the client was able to target and position their products to the right target audience through the right channel.

The Future

In the near future, the chemical industry will witness considerable growth with the relentless growth in innovations. Moreover, due to technological advances, the industry at large will also witness a growing demand for organic chemicals in areas such as biotech and fuel cells.


A must-read case study for strategy specialists and decision makers looking to develop a better understanding of the applications of the chemical industry.

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Will Industry 4.0 Change the Face of the Chemical Industry?

Industry 4.0 has been proven to be a huge success in the manufacturing scenario, and it is gradually making its way to the chemical industry. But will chemical companies be ready to experiment with this technology in their operations? How far is it going to prove beneficial for them? Let us find out. Industry 4.0 incorporates a number of advanced digital and physical technologies that form a greater physical-to-digital-to-physical connection and has the potential to transform the chemical industry by streamlining operations and promoting strategic growth. Businesses focused on business operations can use industry 4.0 to improve productivity and reduce risks, and the companies that are emphasizing on growth can apply industry 4.0 to build incremental revenue andIR_Brochure generate new income streams.

What can industry 4.0 do for the chemical industry?

There are several benefits that chemical companies can leverage from industry 4.0. Let us examine a few of them:

  • Various smart manufacturing techniques such as predictive asset management, process control, and production stimulations, etc. can help players in the chemical industry to improve their business operations.
  • Incorporating industrial 4.0 into business will help chemical companies to optimize their maintenance spends and improve asset efficiency with the help of digital maintenance.
  • Industry 4.0 techniques such as automated control actions and real-time analytics help in supporting predictions, alerts, and prescriptive responses.
  • Companies in the chemical industry can leverage industry 4.0 technologies to control the non-standard processes and ensure energy efficiency.

What should companies in the chemical industry do to incorporate industry 4.0 successfully?

Chemical companies seeking to incorporate industry 4.0 solutions into their business must carry out the following actions:

  • Use historical data of mature products and processes to uncover new business insights and identify new sources of revenue growth
  • Create a cross-functional team to focus on the industry’s opportunities. This way, they can pool in the competencies from different departments for decision making on business operations or growth.
  • Partner with analytics providers, technology vendors, and universities to manage operations at different layers. This will make it easier for them to devise new revenue models by utilizing various data to draw insights on developing chemical products and services
  • Focus on risk management technology and policies. Efficient risk management policies will help companies in the chemical industry to keep themselves safe from risks associated with automated systems and loosely coupled assets.

 


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IR17

Transforming the Chemical Industry: All You Need to Know About Combinatorial Chemistry

The magic of automation technology is slowly changing the chemical industry. Two of the recent breakthrough inventions in the chemical industry are combinatorial chemistry and high throughput screening (HTS). Combinatorial chemistry is a relatively new strategy that has been developed over the past few years. It has proved to be highly beneficial in reducing the time for the discovery of chemical substances. How exactly does combinatorial chemistry work, you wonder? In simple terms, it is all about creating a large number of molecular substances and then rapidly testing them for desirable properties.IR_Brochure

How is combinatorial chemistry different from conventional techniques?

The conventional techniques of chemistry are all about one molecule at a time discovery strategy. However, combinatorial technique involves creating a large number of molecular elements in one go. While only a few hundreds of molecules are discovered using conventional strategy, thousands of molecules are discovered using combinatorial techniques in the time frame of a month. Also, what makes combinatorial chemistry more reliable compared to conventional strategy is that the risk of failure is much lower compared to the latter.

What are the benefits of process automation in combinatorial chemistry?

Now that you know how combinatorial techniques are different from the conventional methods in the chemical industry, here are a few advantages of resorting to automation techniques in combinatorial chemistry that makes it a breakthrough invention in the field of chemistry:

  • Fast – The time taken by conventional techniques to produce one compound is the same as the time taken by a combinatorial strategy to generate millions of compounds by process automation. This makes them a much faster method of synthesis.
  • Easier process – The process of identification and purification of the active molecules from a combinatorial collection or library becomes relatively easier with automation.
  • Safer workplace – Combinatorial chemistry and automation technology make the workplace safer for employees in the pharmaceutical industry by making them aware of the potentially dangerous combinations and conditions.
  • High success rate – Combinational strategies that are incorporated with automation technology have a higher success rate compared to the conventional methods

To know more about combinatorial chemistry and its applicationsAsk an analyst

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Market Entry Advisory: How Infiniti Research Assisted a Leading Chemicals Supplier Identify the Best Approach to Enter the European Market

In today’s competitive business scenario, businesses are accelerating at a fast pace with no limitations. They are planning to break stereotypes of not being confined to a particular region and are investing heavily in expansion strategies to showcase their products. In order to enter a new market, businesses need to understand the drawbacks affiliated to product entry such as the competitors, distributors, and compliance regulations. To help companies successfully establish themselves in new and niche segments, market entry strategy plays a pivotal role. Market entry advisory helps the company gauge information relevant to the company’s markets, determine market opportunity, market penetration strategy, and market development metrics. In the case of a chemical supplier, effective market entry advisory solutions will help the company devise new strategies to enhance the overall decision-making process.

Infiniti’s market entry strategy experts have more than 13 years of experience in helping clients deploy robust strategies in terms of market size calculations, competitor analysis, substitute product analysis, and market growth predictions. Infiniti’s market entry strategy experts also help the client allocate adequate resources and analyze customers’ buying pattern in a seamless manner.IR_Brochure

The Business Challenge

Like all other suppliers, a global chemical supplier specializing in manufacturing specialty chemicals wanted to evaluate the market potential for their products in Europe. The client wanted to analyze the market potential and identify and evaluate the main opportunities in the market space. Additionally, the chemical supplier was also facing difficulty in understanding the products in terms of positioning, revenue scores, geography, and channels. As a result, the chemical supplier wanted to devise an effective market entry strategy and business case.

Our Research Methodology

To help the client devise an effective market entry strategy, Infiniti’s market entry experts followed a comprehensive two-step research methodology, comprising of interviews and discussions with leading market stakeholders and product users. As a part of the secondary research, Infiniti’s market entry strategy experts also collated information from proprietary resources such as company publications, industry forums, journals, and news aggregators.

Market advisory

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Our Market Entry Strategy Helped the Client

  • Gain a detailed analysis of the European market for chemical supply
  • Analyze the client’s main competitors in terms of product range, commercial network, service, and pricing strategy
  • Determine long term corporate plans and formulate strategies to maximize the ROI
  • Present alternative brand positioning with special emphasize on commercial strategy and manufacturing strategy
  • Assess the product portfolio and pricing strategy for different market entry positioning

Benefits of Our Integrated Approach

In just eight weeks, the chemical supplier was able to gauge information on the competitors and their product positioning strategies. The client was also able to develop a robust market entry strategy and evaluate their product portfolio across different market segments.

A must-read case study for strategy experts and decision makers looking to develop an effective market entry strategy for the chemical landscape.
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Procurement Intelligence in the Chemicals Industry

The chemicals industry often encounters trouble in procuring the right raw materials of the right quality at the right price. In case of specialty chemicals, the purchasing expenditure can go as high as 60 percent of what is gained as sales revenue. Pricing is a highly volatile aspect in the global chemicals industry, which makes it more important for stakeholders to adopt the right procurement intelligence solutions.

Procurement challenges for chemicals

There are both demand and supply side bottlenecks in the chemicals industry. Even though the market for chemicals raw materials has been developing since the year 2000, the transportation expenses backed with delay in lead times has emerged as a major impediment in this industry. Similarly, being a highly niche industry the demand side often faces challenges in the form of complex product requests and inflexible production systems.

The right procurement strategy is sure to bring a huge difference in the purchasing plan of the company. For instance, companies can bring down the overall spending by up to 10 percent and boost their earnings before interest and taxes (EBIT) by around five percentage points annually.

Procurement intelligence to the rescue

Though many chemicals companies have hired procurement managers to build an agile purchasing strategy, procurement intelligence is sure to improve their overall sales plan. By segmenting the entire purchasing process based on value and strategic importance, players in the chemicals industry can capture a major share of the market and beat the competition. Also by employing purchasing optimization tools, procurement intelligence helps players in the chemicals industry to overcome traditional roadblocks in the industry.

Procurement intelligence also improves the savings in the indirect categories like IT and communications, facilities management, and office supplies, by as much as 25 percent through right distribution of resources. It even helps in containing the volatility in the market, especially in the chemicals market. By imbibing best procurement practices, procurement intelligence enables companies to overcome both demand and supply side challenges and emerge as major players in the global chemicals industry.

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Digital Marketing: The Latest Disruptor in the Chemicals Industry

The chemicals sector is one of the strongest performers in the global value chain. Yet, industry experts are quite cautious when it comes to predicting the future of this industry. Several surveys reveal that the names which figured as the ‘big players’ in chemicals industry a decade back no longer exist in the list. Following the traditional ways of reaching out to the client base is one major reason behind this development. Therefore, it becomes more important for chemicals companies to make drastic changes in their sales and marketing strategies, to remain relevant in the competition.

How can going digital improve the chemicals industry?

Going digital is not about just setting up an IT team and getting a couple of infrastructure requirements in place. Rather, digital transformation is a process which involves the adoption of mindsets, skills, and tools, which are driven by technology and touch every aspect of the business. By going digital, be it in terms of marketing or sales, chemicals companies gain:

  1. Better market access
  2. Improved growth prospects
  3. Ability to execute data-driven decisions
  4. Ability to offer better customer service

Though traditional marketing and sales strategy do help in capturing new markets, digital marketing has opened avenues of growth in markets which were inaccessible till date. By overcoming the geographical barriers, digital marketing enables manufacturers to connect with new prospects and turn them into long-term clients.

Along with providing market access, digitization also boosts the chances of organic growth throughout the chemical’s value chain. Right from raw materials to end-consumers, digitization makes cross-functional integration of the R&D, marketing, and the sales team quite easy. And, as most of the decisions can now be data driven rather than based on the rule of the thumb method, what the businesses achieve is a clear-cut vision and direction.

Infiniti examines the effect of digital disruption on the chemicals industry

Well, to begin with, it’s not that the entire chemicals industry will be revamped once companies go digital. Right from huge amounts of investment, and navigating barriers like government regulations, digital transformation will certainly not be a cake walk for manufacturers in this sector. At the same time, as governments are coming up with new policies, digitizing the commercial operations and backing them up with advanced analytics and machine learning tools, conversion to a digital platform is sure to enhance the overall performance of the global chemicals industry.

IR14

Big Data Promises Big Opportunities for the Chemicals Industry

It has been more than a decade that the chemicals industry has adopted IT and related solutions to keep track of raw material spend, freight, and logistics. Fast forward to 2017, big data and analytics have emerged as vital processes for enhanced business activities, better execution of operations, and improved marketing strategy. Most chemical companies are now looking for comprehensive solutions which bring together data on suppliers, sales & marketing, lab information, as well as inputs on the third parties. Today, major players in the chemicals industry strongly believe that people, process, and technology are not the only pillars of modern business – rather big data and data analytics too have joined this list.

Big opportunities which big data brings to the chemicals industry

From dishing out products in huge volumes to adding a human face to their products and services, the chemicals industry have come a long way in the past two decades. Manufacturers are expanding their product portfolio to cater to the new demands of the consumers, and gain a competitive edge in the global market. Due to these reasons industry experts are looking for ways in which big data will open new opportunities for the chemicals industry.

Improved pricing, smart production, move towards greener industry, and better management of the workforce are some of the block-bluster opportunities which big data has brought into the chemicals industry.

Smart production

Through platforms like Hadoop, big data seamlessly integrates multiple data sources to provide real time information on asset utilization which in turn enhances the operational decisions. Data analytics further helps in monitoring the amount of energy consumed, bring down the volume of waste, and boost the overall ROI. A major area where big data has brought big change is that of product distribution. Distribution optimization is a major challenge for manufacturers in the chemicals industry. Through real-time tracking, big data enables companies to transfer products from manufacturing facilities at the right time to various destinations, thereby bringing down the inventory holding costs. This way by bringing together data from various departments in the chemical industry, analytics helps in making smarter and quicker decisions.

Improved pricing

Pricing in the chemicals industry is a rather complex phenomenon. It is often seen that the factors on which the prices have been announced are based on data that turns outdated in a short span of time. By considering accurate data from a variety of sources, big data helps in building pricing strategies which are highly competitive in nature. There are chemicals companies which employ big data to integrate marketing information with production strategy to initiate better contract negotiations and arrive at competitive pricing. Big data also enables easy revision of existing prices, so that manufacturers can build their procurement strategies.

Enhanced management of workforce

With several companies resorting to employee intelligence and HR analytics to manage their workforce in an effective manner – big data is being employed to gather information from third-party sources, and from front-line managers to forecast workloads as well as measure job satisfaction and employee engagement. It also helps to consider least visible contextual insights to improve the hiring process and improve employee retention.

Big data, therefore, is not just a new technology which is helping the chemicals industry grow – rather it is a force which is all set to reign in strategical changes in the global chemicals industry.

Metal Fabrication

Top 3 Strategies to Boost the Performance of the Chemicals Industry

After an anemic growth of 2% in 2016, major players in the chemicals industry are struggling to bring profitable expansion to their businesses. In the case of the chemical companies involved in petroleum-based products, the decline in the prices of oil has had a negative effect on their sales. Industry experts believe the next few years too will be rather rough for the chemicals industry, given the changes in the economic structure, the inherent uncertainty in the market, and hyper- competition between the players.

It is in this scenario that established names in the chemicals industry are looking for strategies which can be converted into actionable plans. Strategies which can act as a catalyst for growth in the chemicals industry are:

1.    Striking a fine balance between pricing and volume

It is the time that chemicals companies understand that high volume of chemicals sale will not necessarily fetch them higher profits. The structural weakness of the chemical industry provides a limited scope for high demands from consumers. Except for renewable products like biopolymers, the demand for conventional chemicals has rather dipped at a significant pace. Manufacturers will benefit if they shift their focus from increasing the volume of sales, to improving their pricing strategies. Pricing excellence, the most overlooked aspect of sales strategy, has now emerged as a major driver of short-term value-capture benefits.

2.    Revamping product portfolio

One of the best ways to stay relevant and competitive in the industry is to revamp and expand one’s product portfolio. Major names in the chemicals industry like Bayer, Dow, and DuPont have already entered into mergers and acquisitions to gain a better position in the market. By expanding the product portfolio, manufacturers are moving into lucrative areas which are sure to enhance the overall profitability of their business.

3.    Adoption of digitization

Digitization has emerged as a panacea for many businesses. The chemicals industry too has woken up to the advantages of going digital. Right from operations, to present themselves as solution providers – digitization has touched almost all the aspects of the chemicals industry. It has enabled manufacturers to move ahead from just being ‘product sellers,’ through the integration of manufacturing and business processes, and optimizing the sales and marketing strategies. Machine learning and artificial intelligence have further enhanced the overall functioning of the chemicals industry. Not only has it downsized the workforce, but the entire process of operations, redesigning work strategy, and adding an element of localized control has given a competitive edge to manufacturers in the industry.

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